Step by step guide - Preparing terms of settlement

You can talk to the plaintiff about settlement at any time. By talking to the plaintiff you might be able to agree to 'terms of settlement' or a 'settlement agreement'. 

Your agreement should include ​the amount that you will pay to the plaintiff and how it will be paid if the claim is about money.

Your agreement should also deal with the payment of legal costs. You may agree that one party will pay costs of the other or that each party will pay their own costs. 

If you negotiate in writing, you can write the words 'Without prejudice' at the top of your correspondence. This means that one party can't use evidence of settlement discussions against the other party if the case goes to a hearing.

It is a good idea to put a settlement agreement in writing once you've agreed to the terms. Putting it in writing means there is written evidence about what was agreed. It also reduces the chance of confusion about the terms. 

There is no set format for terms of settlement, but there are some things you should include, such as: 

• ​​your full name and address and the defendant's full name and address
  
• the details of the court case that has been started, such as court case number, registry and division
  
• the date of the agreement
  
• any amount that has to be paid
  
• if payment is by instalments, how much are the instalments and when each instalment must be paid
  
• whether there is an agreement about the payment of interest
  
• if part of the agreement includes judgment in your favour
  
• how the case is to be ended, either by an order of the court or notice of discontinuance
  
• what will happen if one party doesn't do what they have agreed to do. 
  

If the terms of settlement is for something other than the payment of money the court may need to adjourn your case to make sure the defendant does what they agreed to do.

Instructions: ​ Instructions for writing terms of settlement.

Samples: 

Sample terms of settlement – debt

Sample terms of settlement – car accidents​

Once you and the plaintiff have written down your agreement, you both need to sign it. Each of you should have your signatures witnessed and the witnesses should provide their full names and addresses under their signatures. It is a good idea if a lawyer or officer of the court such as a registrar witnesses the signatures. 

Once your version of the agreement has been signed and witnessed, you can exchange it for the plaintiff's signed and witnessed version. 

Once you have a signed settlement agreement, you and the plaintiff can end the case. There are a number of ways this can be done:

Notice of discontinuance

The plaintiff can end the case by filing a notice of discontinuance. This is a notice telling the court that they no longer want to go ahead with the court case. It does not tell the court anything else about your settlement agreement. For more information, see Notice of discontinuance in Settling your case. 

Consent judgment or order

If you and the plaintiff have agreed to settle the case you can file a consent judgment or order with the court. It can include some or all of the terms of settlement and is included as part of the court's records. For more information, see  Step by step guide - Consent judgment or order.

Do nothing

If you and the plaintiff agree to terms, sign and exchange the agreement, and then do nothing further, the court will eventually dismiss the case.